Financial Management

GAO reviewed the Department of Veterans Affairs' (VA) financial management systems, focusing on how VA could improve internal accounting controls and financial management.

GAO found that VA: (1) made significant progress in preparing its consolidated financial statements in accordance with generally accepted accounting principles, although statements did not always agree with underlying accounting systems and general ledger balances and had undocumented or poorly supported consolidation and closing procedures; (2) did not adequately implement internal controls for medical care cost recovery; (3) lacked automated system internal controls to ensure complete and accurate processing of compensation, pension, and education benefit payments data; (4) did not obtain proper authorization for releasing payments over threshold amounts; (5) did not meet requirements in such areas as timely collection on accounts receivable, recognition and recording of liabilities, and prompt and accurate accumulation and reporting of obligational data on all appropriated funds; (6) improved principal controls in its housing credit assistance area, although remaining weaknesses included the lack of an established system for recognizing losses on guaranteed loans, lack of reconciliation between the general ledger control account and subsidiary ledger balances, and improper documentation and approval of journal vouchers; (7) lacked effective payroll system controls for implementing proper pay changes for all employees, resulting in incorrect payments; and (8) did not perform pay verifications and reconciliations to ensure correct processing of payroll data.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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